Not to beat my own drum, albeit it is rather satisfying to do so once in a while, a few years ago, almost six to be exact, wrote a column highlighting the three steps to growth; by the way, nowhere therein was GDP mentioned even once!
In that column back then, the second step to growth highlighted that private property is indeed a necessary ingredient for innovation, entrepreneurship and growth. Accordingly legislation requiring all property disputes to be decided within a maximum of three year, including appeal to the highest forum, was deemed necessary enough to argue that all costs for compliance with this suggestion should take precedence, even over the defence budget.
Perhaps I am wiser now as regards what should take precedence in the budget, however I continue to maintain that property disputes which painfully crawl for 3 to 4 decades in the courts are a hurdle to growth.
Therefore, the Law Minister's recent affirmation in a press conference that the Standing Committee on Law had passed the Civil Procedure (Amendment) bill which will ensure speedy trial of civil cases, resulting in cases getting settled in a matter of one or one and a half years, is indeed great news.
Whilst I am broadly ignorant about what does or does not fall within the definition of civil cases, but surely property dispute cases have the first right to be called DEWANI!
Unfortunately I am also rather clueless about the rules of business of the National Assembly, and am not sure what more needs to happen before the bill becomes a law; but hopefully the "Sitting Committee" will now soon pass the bill too, after which the entire National Assembly will hopefully quickly vote in its favour to make it the law of the land.
Getting it passed from the Sitting Committee is easier said than done.
Is it not rather curious that no one in the electronic media latched on to this critical piece of news? Admittedly the plight of Kashmir and India's bull**** should be the top news for the foreseeable future; however the national economy, on an existential scale, deserves to be the next in line.
There is likelihood that the celebrity experts on the idiot box were unable to figure out how this legislation can positively impact the economy; whilst everybody is an economist today, nobody knows how the economy actually works, because if anybody did, somebody might have taken steps to apply brakes before we jumped over the cliff into a full blown financial crisis.
Land is capital, a key factor of production. Without clear ownership rights, practically the case in all rural lands holdings, this huge repository of capital cannot be leveraged. Banks, and perhaps rightly so, refuse to accept such lands as collateral thereby scuttling opportunities and strategies for numerous enterprises.
Except, a more sinister reason for this bit of news not getting the limelight it deserves, can also be that a few of those sitting in lobbies are conscious of the repercussions this bit of legislation could have for the business models of their clients. That being the case, the legislation may not see the light of day for a while, probably never.
The government therefore needs to proactively support the law ministry in getting this particular bit of legislation enacted on a fast track basis; and even that might not achieve the desired state.
Compliance with this legislation, once enacted, is expected to be another nightmare; the resources needed to manage the backlog of thousands of cases, will cost a pretty penny and may raise serious practical ramifications which may not have purely legal solutions. Sometimes morality does trump legality.
Nonetheless, the government needs to do what needs to be done; without clear property rights, the economy will never achieve its full potential.
Given the opportunity, anyone would like to beat their drums continuously!
For the record, the first step for growth, in the article 6 years ago, focused on curtailing unnecessary consumption.
"The first step: trade is definitely good; however, borrowing to finance trade deficits and trading with the enemy are principles that can hardly be considered - under any stretch of the imagination or convoluted definition - sane... When a child acts irresponsibly, the parent - in this case, the government - must step in to discipline and guide. The first step, therefore, is to review all imports of goods and services, with a view to intelligently curtail unnecessary consumption, by hook or by crook. ... At the same time, focus on export substitution manufacture and, in the interim, ration domestic consumption of exportable items to provide a breathing space in the trade deficit", myself as published by Daily Times on 20th October 2013.
Nobody was reading back then; hopefully somebody reads today!
Finally, the third step had to do with amicably inviting the informal economy to join the formal economy through tax legislation; albeit the key words are "Amicably inviting". The carrot, not the stick, in my opinion, is a better choice in this regard; the objective should be to facilitate the informal sector, not eliminate it.
Late but great: at least we are finally moving in the direction of the second step to growth.
(The writer is a chartered accountant based in Islamabad) Email: [email protected]
Twitter: @LeAccountant